Importance of Developing a Strong Supply Chain and Logistics Program

Supply Chain Management (SCM) and logistics impact all aspects of your manufacturing company. Every finished product travels a complicated path from procurement to the end user. The entire SCM process continues to grow, based upon the increased demands placed upon it.

If you are a manufacturer trying to keep production and product delivery flowing, you are acutely aware of the importance of SCM and logistics. Without efficient operations, many aspects of a manufacturing company, ranging from unsatisfied customers up to the very financial health of the company, are at stake.

Supply Chain Management

Supply Chain Management (SCM) is the discipline of managing the flow of goods and services, from supplier to manufacturer to seller and finally, to the consumer. This discipline includes managing inventories from storage or raw materials, work-in-progress and finished goods, from point of origin to point of sale. SCM not only deals with the flow of physical goods and services, but also for data that accounts for each item sold. Your SCM system should produce data that is “actionable” on your part. This data should act as a roadmap to increasing the efficiency of your production process, as well as contributing to increased quality.

The goals of a strong supply chain management program are to:

1. Reduce inventory
2. Increase the speed and efficiency of transactions
3. Increase revenue by efficiently satisfying demand

It is the supply chain management team that is responsible for achieving customer satisfaction and ultimately maximizing company profits.

Logistics

Logistics is a critical part of your manufacturing company’s SCM. Logistics management is defined as that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements. It is transportation management, material handling, packaging and security. Without logistics, critical business functions such as routing, scheduling, distribution, planning, departure and arrival times could be mishandled.

It is important to develop a strong supply chain and effective logistics program for your manufacturing company. A strong supply chain and logistics program:

1. Improves brand and company reputation with consumers and partners
2. Increases transparency
3. Increases verifiable confidence in accuracy
4. Increases customer satisfaction
5. Decreases wasted product and spoilage
6. Assists in the understanding of production capacity
7. Eliminates redundancy
8. Optimizes speed and efficiency of delivery
9. Provides a way to develop a competitive advantage without lowering prices
10. Increases negotiating power with vendors
11. Opens access to more favorable financing terms

To find out more about managing your own supply chain and logistics program and to schedule a free evaluation, contact NJMEP to learn more. NJMEP will help you to build an effective supply chain that keeps customers happy and keeps products flowing through the production line. Call us at (973) 998-9801 – our experts can guide you through the process of building a dynamic and strong supply chain and effective logistics program.

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